MGM Is Going Up For Sale

MGMby Joey Paur

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We reported earlier that MGM was having financial problems and that it would possibly be forced into bankruptcy. It looks like things haven't gotten any better for them. Within the next few week MGM will be auctioned off. It most likely will be auctioned off in pieces.

MGM has several projects in the works and I don't think it will effect any of the big productions that are currently going on like The Hobbit or the remake of Red Dawn. One of the good things to come out of this is it looks like that Poltergeist remake isn't going to happen anytime soon.

From Variety:

This means that a major company, such as Time Warner, could buy the MGM-UA library while another entity might acquire the logo, and yet another deal could be made for United Artists. Sources speculated that Kirk Kerkorian, who has already bought and sold MGM twice, might buy the logo once again.

Last summer Harry Sloan was bounced as MGM's CEO and Stephen Cooper, a specialist in restructuring companies started meeting with bankers with the aim of restructuring some $3.7 billion in debt. One of his latest projects was Krispy Kreme. There was speculation that the combined assets of MGM may be worth as little as $1.5 billion in the present market.

The various equity owners of MGM, including several private equity firms, have already written down their $5 billion acquisition, which closed in 2004.

MGM's library contains 4.000 titles, but some specialists in film libraries consider its list of titles to be geriatric.

Any sort of auction would need approval of a two-thirds majority of the bondholders, and a couple of the bondholders insist they have not been contacted as yet. Some sources believe a pre-packaged bankruptcy is still an option, and there is still an expectation that Time-Warner might make a last eleventh hour bid.

MGM's released only a remake of "Fame" this year. For 2010, it's opening two comedies -- "Hot Tub Time Machine" in March and "The Zookeeper" in October -- and a remake of "Red Dawn" in November.

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